SNC-Lavalin signs an agreement in principle for a Joint Venture with China National Nuclear Corporation & Shanghai Electric Company

Benefits to Canada include: high quality jobs, growth, investment and a more dynamic domestic nuclear sector

Innovations developed in new design centres would contribute to Canada’s clean energy engagements following COP21, enhance its environmental stewardship abroad and reduce carbon emissions globally

SNC-Lavalin (TSX:SNC) is pleased to announce it signed an agreement in principle for a new Joint Venture with China National Nuclear Corporation (CNNC) and Shanghai Electric Group Company Ltd. The new company would develop, market and build the Advanced Fuel CANDU Reactor (AFCR™). The creation of the joint venture in principle follows the signing of a framework agreement in 2014, and is subject to all government and regulatory approvals.

The new company is expected to be registered in mid-2017, and would be followed by the formation of two design centres — one in Canada and another in China — to complete the AFCR™ technology. This could lead to construction of the world’s first two AFCR™ in China, and possibly subsequent builds in China and around the world.

"This is a game changer in the nuclear industry, and a great endorsement of our expertise and CANDU nuclear technology from the largest nuclear market in the world,” said Sandy Taylor, President, Power, SNC-Lavalin. “Each new build in China, and anywhere in the world, will benefit Canada in terms of job creation, innovation and nuclear research & development, environmental stewardship, and will contribute to reduce global carbon emissions.” Canada's nuclear sector directly contributes to over $6 billion to the economy annually, employs more than 30,000 highly trained and specialized people, and creates an additional 30,000 jobs indirectly through contracting1.

The market potential for AFCR™ technology in China is considerable. Each AFCR™ can use recycled-fuel from four light-water reactors (LWRs) to generate six million megawatt-hours (MWh) of additional carbon-free electricity without needing any new natural uranium fuel. This would be enough new electricity to power four million Chinese homes, and also displace six million tonnes of carbon emissions per year vs. coal, the equivalent of removing one million cars from the road. China has more than 33 LWR nuclear power reactors in operation and another 23 LWRs under construction.

About SNC-Lavalin

Founded in 1911, SNC-Lavalin is one of the leading engineering and construction groups in the world and a major player in the ownership of infrastructure. From offices in over 50 countries, SNC-Lavalin's employees are proud to build what matters. Our teams provide engineering, procurement, construction, completions and commissioning services together with a range of sustaining capital services to clients in our four industry sectors: oil and gas, mining and metallurgy, infrastructure and power. SNC-Lavalin can also combine these services with its financing and operations and maintenance capabilities to provide complete end-to-end project solutions. www.snclavalin.com

About CNNC

The China National Nuclear Corporation (CNNC) is a large State-owned enterprise. It successfully built the first nuclear power plant in the Chinese mainland. CNNC has established a complete nuclear technology industry framework. It is a main part of the national nuclear technology industry and a leading element nuclear energy development. It undertakes missions to facilitate domestic economic development. CNNC currently operates two CANDU 6 reactors at the Qinshan site (100 km SW of Shanghai) through its subsidiary, TQNPC.

About Shanghai Electric Group Company Ltd

Shanghai Electric is one of the largest equipment manufacturing conglomerates in China. High efficiency and clean energy as well as new energy equipment represent its core business segments, which account for 70% of segmental revenues. Leading products include 1,000MW supercritical thermal power units, 1,000MW nuclear power generation units, heavy-duty equipment, power transmission and distribution equipment, elevators, printing machinery and machine tools. Shanghai Electric is currently the leader in China’s equipment manufacturing sector. According to an assessment for the “Top 500 Asian Brands,” Shanghai Electric was ranked the 5th in Asia and the 1st in China in machinery industry. Shanghai Electric is developing itself into a sustainable, modern, and international enterprise group with clearly-defined principal businesses and distinctive advantages within the large-scale equipment sector.

About the AFCR™

The Advanced Fuel CANDU reactor (AFCR™) is a 700MW Class Generation III reactor based on the highly successful CANDU 6® and Enhanced CANDU 6® (EC6®) reactors with a number of adaptations to meet the latest Canadian and international standards. Its fuel flexibility allows it to use recycled uranium or thorium as fuel. It has a heavy-water moderator and heavy-water coolant in a pressure tube design. CANDU reactors can be refuelled on power and have one of the highest lifetime capacity factors among the world’s reactors.

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About SNC

Founded in 1911, SNC-Lavalin is a global fully integrated professional services and project management company and a major player in the ownership of infrastructure. From offices around the world, SNC-Lavalin's employees are proud to build what matters. Our teams provide comprehensive end-to-end project solutions – including capital investment, consulting, design, engineering, construction, sustaining capital and operations and maintenance – to clients in oil and gas, mining and metallurgy, infrastructure and power. On July 3, 2017, SNC-Lavalin acquired Atkins, one of the world’s most respected design, engineering and project management consultancies.